Monday, April 16, 2007

Failed Campaign...Or Lack Their Of

K-Mart Suffers Due To Lack Of Advertising...

Over the last ten years the list of common, everyday, affordable stores has slowly decreased day by day. While many of these stores were smaller and common only to specific regions of the United States, one nation-wide store has all but disappeared due to stiff competition and sadly, to stupid mistakes.
Not too long ago Kmart, feeling secure in their place in American society, started focusing at becoming a location similar to that of their competitor Wal-Mart, attracting customer’s with their every day low prices on quality items. This move forced the company to cut their spending costs in as many areas as possible. Sadly, one of the areas they cut back on was their advertising.
The store made the drastic change to cut back in their Sunday advertising by cutting their Sunday circular pages by 50% in the span of only two quarters. During the first quarter they cut their Sunday advertisements by 15 pages, and then in the second quarter they drooped their circulars by 75 pages. While this cut lead to an increase in the stores weekly foot traffic, the company experienced a $224 million dollar loss in the end of the third quarter in 2001 due to the decrease in the amount of Sunday traffic (Howell).
The problem, according to ceo Chuck Conway, was the mistake of cutting to much advertising at such a fast rate. The cut in advertising led to a cut in the promotion of merchandise that in turn, led to customers heading to the store’s main competition, Wal-Mart, and all other competing locations.
Clearly the problem with this campaign, or the lack of a campaign was not so much a problem with what was being advertised or the manner in which the advertising took place. It has more to do with the idea that if you are going to be offering the same product at competition prices, then you need to get the word out. With new competition arriving on the market everyday, a location that is “secure” in its market holdings cannot simply start to disappear off the face of the earth at such a rapid pace, they cannot expect to be “free” of any kinds of consequences.

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